Frequently Asked Questions
The value of a web hosting company depends on a variety of metrics. We will determine a number we deem appropriate through the Discounted Cash Flow (DCF) valuation method. We estimate future cash flow by combining net income and depreciation/amortization minus capital expenditures and change in working capital. This free cash flow will be discounted to a present value by using the company’s weighted average cost of capital (WACC). WACC is an optimal balance of the company’s equity-to-debt ratio. We will also account for potential synergies such as savings (consolidations), financial (reducing debt), revenue (service expansion), more manpower, and higher production capacity.
The value of a web hosting client can vary based on factors like the services they use, the revenue they generate for your business, and the potential for future business. When selling your web hosting company, we aim to provide fair compensation so that you are adequately compensated for the transfer of your clients.
We have a simple Non-Disclosure Agreement (NDA) each party can sign at the outset, if desired. But we keep quiet on all deals, with or without the paperwork.
There are an unlimited number of creative options, but most are a variation of money down, performance, and the balance paid 90 days later. Monthly payments are also an option. And we gladly pay prompt and ongoing commissions on new business.
So far, we’ve gotten lawyers involved in only one deal. It takes more time and adds to expenses. In larger transactions, it’s probably wise. But if terms are spelled out clearly and both parties retain some security, it can be done without a lot of costly complications.
1. The simplest reason is that we pay more to buy your website hosting business. We’re not a huge consolidator, looking to buy accounts for $70 each. We’re an “added value” shop. We are web developers and digital marketers, and we like taking care of our small business customers. We’re willing to pay 4-6 times higher for customers who need our service and expertise.
2. Our website hosting business plan is tailored to our customer’s needs. We are a small team of real people. We’re not one of the big players in this arena. Because of that, our websites aren’t using the same server as hundreds and thousands of others, ultimately slowing the sites down. If your website runs into a problem, you won’t have to jump through hoops or speak to an automated service to get help. We’re here and ready to solve any issues you may have quickly and efficiently.
3. We will take care of your customers and make you look good. If you care about your customers, or even if you’ve neglected them, we’re ready to step in and give them attention. We’re not too aggressive on upselling, but we’re not opposed to it, either. Business customers often need and welcome suggestions to make their online presence better- especially when they learn that it can become a profit center and not just a cost.
4. We work for small businesses and deals. In fact, we prefer them. You have 5 customers and you’re sick of the phone calls? Call us. Have 1 or 150? Definitely call us. If you have more than 150, call us.
